Millions of households will see their energy bills drop by around £129 a year from July as the latest energy price cap kicks in.
Ofgem, the energy regulator, today released its latest quarterly energy price cap for July to September, which sets the maximum unit price and standing charge suppliers can charge for gas and electricity.
The latest cap is 7% lower than it currently is, taking the average annual price to £1,720 – £129 lower than the £1,849 April price cap. The actual costs will depend on how much energy you use.
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This is based on a dual fuel energy tariff for the typical home paying by direct debit.
Although the price drop will be some relief following the string of price rises we saw during ‘Awful April’, energy prices still remain historically high.
Tim Jarvis, director general of markets at Ofgem, said the fall would be “welcome news for consumers,” but also acknowledged that the regulator was aware that prices remain high and some continue to struggle with the cost of their energy.
Jarvis urged customers to shop around to find “better deals” and to “talk to your existing supplier about the best deal they can offer you.”
Ofgem said the main driver for the overall reduction in the price cap came from declining wholesale energy prices, accounting for 90% of the fall.
How much will I pay for my energy bills?
The price below compares what you are currently paying and what you will pay from July to September, after which a new price cap will come into play.
Remember, the price cap is for the unit price, so your bill is determined by the units you use.
|
Energy price cap 1 April to 30 June 2025 |
Energy price cap 1 July to 30 September 2025 |
|
|---|---|---|
|
Electricity |
27.03 pence per kWh |
25.73 pence per kWh |
|
Standing charge |
53.80 pence daily |
51.37 pence daily |
|
Gas |
6.99 pence per kWh |
6.33 pence per kWh |
|
Standing charge |
32.67 pence daily |
29.82 pence daily |
Source: Ofgem
Will energy bills drop again from October?
We do not know for certain whether energy bills will drop again in October as the date is so far away.
Some very early predictions suggest that the October price cap will fall, though not by a substantial amount.
EDF energy predicts that the October price cap will fall to £1,702, and then rise slightly in January to £1,712
Cornwall Insight, an energy consultancy well-regarded for their price cap predictions, also expects energy to become cheaper in the second half of the year.
The consultancy said it expect a “modest” drop in the price cap in October, followed by another drop in January 2026, but does have specific figures at this stage.
These are long-range forecasts and should therefore be taken with a pinch of salt as a lot could happen between now and then to affect wholesale energy prices.
Energy bills could also change this year depending on whether Ofgem introduces new rules on standing charges. The regulator recently conducted a consultation on plans to force energy firms to offer tariffs that have zero standing charge.
Should you fix your energy bills?
Even though prices have come down, energy prices can be volatile and if you want security, fixing can be a good option. Ofgem claims customers can save around £136 by fixing, but you should shop around for the best deals.
A fixed energy bill means that customers agree an energy price with their suppliers that they will then pay for a fixed period and you are protected from any cap rises, as the energy price cap only affects those on a variable tariff.
But if the price cap falls, you could potentially be stuck paying more.
How can I reduce my energy bills?
Though a fall of 7% in the price cap will be good news for many consumers, energy prices still remain much higher than they were before the energy crisis.
But there are a number of things you can do to keep your energy bills low. According to the Energy Saving Trust, simple moves such as not over filling your kettle could take £29 off your annual energy bill, or installing drought proofing to save around £80 a year.
If you’re looking at heat pumps, take a look at our article on what is involved when installing a heat pump one and if you could save money in the future.
